2 Petty Cash What is petty cash? An amount of cash kept on hand and used for making small cash payments.Why would a business want to use a petty cash fund?Save time and moneyHow does a business control the flow of money in and out of the petty cash fund?One person to manage petty cash fund.All transactions must be documented.
3 Establishing a Petty Cash Fund Lesson 6-4 (GJ)Establishing a Petty Cash FundAugust 17. Paid cash to establish a petty cash fund, $ Check No. 8.CashPetty Cash1. Which accounts are affected?Petty CashCashDebitNormal Balance200.002. How is each account classified?Petty Cash is an asset account.Cash is an asset account.DebitNormal Balance3. How is each classification changed?Petty Cash is increased.Cash is decreased.200.004. How is each amount entered in the accounts?Petty Cash increases on the debit side.Cash decreases on the credit side.
4 Petty Cash Slip Used to document payments from the petty cash fund Shows what the payment was forIs signed by the petty cash administrator
5 Replenish a Petty Cash Fund What does it mean to replenish the petty cash fund?Bring the fund back to its established amountWhen should the fund be replenished?At the end of a month (ALWAYS)When the petty cash fund is lowAll petty cash slips are totaled and journalized in the corresponding account.Cash is credited for the total amount of slips
6 Replenish a Petty Cash Fund August 31. Paid cash to replenish the petty cash fund, $30.00: miscellaneous expense, $20.00; advertising, $ Check No. 12.21431. Write the date.2. Write the title of the first account debited. Write the debit amount. Write the title of the second account. Record the debit amount.3. Write the title of the account credited. Record the credit amount.4. Write the source document number in the Doc. No. column.